G.R. No.

L-30067 April 19, 1983

B. F. GOODRICH PHILIPPINES, INC., petitioner,
vs.
HON. TEOFILO REYES, SR., in his capacity as Secretary of Commerce and
Industry, respondent.
B.F. Goodrich Philippines, Inc. contends in this declaratory relief proceeding, with the
then Secretary of Commerce and Industry Teofilo Reyes, Sr. as respondent, that it does
not fall within the ban. It is engaged in the business of manufacturing and selling rubber
products, to dealers who in turn sells it to others.
3
Under the statute, it cannot engage
in retail business, namely to sell directly to the general public, merchandise,
commodities or goods for consumption.
4
It admitted that it sold directly to the
government and all its instrumentalities and/or agencies; public utilities; agricultural
enterprises; logging, mining, and natural resources exploration firms; automotive
assembly plants who buy its products in large bulk; industrial enterprises; and
employees and officers of its company.
5

There was a plea for a preliminary injunction and a restraining order was issued. The
principal affirmative defenses being that the petitioner should not be considered exempt
as it is not a corporation wholly owned by citizens of the Philippines and that even on
the assumption that such was the case, it being alleged in the petition that only 1.46%
of its capital stock was owned by aliens, non-Filipinos or non-Americans, the Parity
Amendment being still in force and effect at the time of the filing of this petition, still
Republic Act 1180 is quite clear as to its not being applicable to petitioner considering
the allegations of the petition. The plea was for dismissal.
In the stipulation of facts, the allegations set forth above were admitted.On such
stipulation of facts, the lower court rendered its decision making permanent the
restraining order issued although holding that petitioner is not exempt from the
provisions of Republic Act No. 1180. The reason for such a decision was set forth thus:
"It has been stipulated that the rubber products of the petitioner desired to be sold in
bulk to automotive assembly plants will be resold by the latter to their own customers at
a profit without changing the form of said rubber products; that the rubber products
desired to be sold by the petitioner to public utilities, power and communication
companies, [etc.]and persons engaged in the exploitation of natural resources are to be
used by the latter in their operations to produce and to render goods and services to
third parties and to the general public: and that the other products desired to be sold to
the Government and all its instrumentalities and/or agencies, public utilities [etc.]other
entities and persons engaged in the exploitation of natural resources, and industrial and
commercial enterprises are to be sold at prices lower than at which they are sold to the
general consuming public by dealers and distributors of said rubber products. An
examination of the types or classes of customers to which the petitioner desires to sell
its rubber products will reveal that in the great majority of such customers, the sale to
them may not be classified as the sale of consumer goods or merchandise for the
satisfaction of human, personal or household wants so as to be considered as retail in
the sense already discussed above. // Nonetheless, it is observed that some of the
listed customers would easily fall within the purview of a final consumer of the product
who buys the same for the satisfaction of a personal want. Among these customers are
'proprietary planters,' 'persons engaged in the exploitation of natural resources,' and
'employees and officers of the petitioner.'
7

Both petitioner and respondent appealed to this Court. A ruling on the question raised
as to the precise meaning of retail business is obviated by the issuance of Presidential
Decree No. 714
8
amending Republic Act No. 1180. Under the former, , the term "retail
business" covers "any act, occupation or calling of habitually selling direct to the general
public merchandise, commodities or goods for consumption, but shall not include: (a) a
manufacturer, processor, laborer or worker selling to the general public the products
manufactured, processed or produced by him if his capital does not exceed five
thousand pesos, or (b) a farmer or agriculturist selling the product of his farm."
9
Under
the aforesaid Presidential Decree, , two more paragraphs were included. They are: "(c)
a manufacturer or processor selling to the industrial and commercial users or
consumers who use the products bought by them to render service to the general public
and/or to produce or manufacture goods which are in turn sold to them; (d) a hotel-
owner or keeper operating a restaurant irrespective of the amount of capital, provided
that the restaurant is necessarily included in, or incidental to, the hotel business."

It is
clear from the above that proprietary planters and persons engaged in the exploration of
natural resources are included within the aforesaid amendment. The lower court
decision, however, is in accordance with law insofar as employees and officers of
petitioners are concerned. As thus modified, the decision calls for affirmance.
WHEREFORE, the lower court decision is affirmed declaring that petitioner is not
engaged in retail business within the purview of Section 4 of Republic Act No. 1180 in
accordance with Presidential Decree No. 714, except as to its sales to its employees
and offices.
NOTE: Paragraph XX of the stipulation of facts made mention of the opinion of the then Secretary
of Justice, Pedro Tuason, who ruled that a corporation whose capital stock was 99.99% Filipino and
0.01% alien was exempt from the provisions of Republic Act No. 1180, based on the doctrine of "de
minimis non curat lex"; hence, the said corporation could retail.